Putnam's Handy Law Book for the Layman
TextAuthority may be conferred on an auctioneer in the same manner as on any other agent for the sale of similar property, verbally or in writing. Even to make a contract for the sale of real estate, oral authority to the auctioneer is sufficient, in the absence of a statute to the contrary.
Authority to sell property does not of itself imply authority to sell it at auction, and the purchaser therefore who has notice of the agent's authority or knowledge sufficient to put him on inquiry, acquires no title to the property thus purchased. If goods are sent to an auction room to sell, this is deemed sufficient evidence of authority to sell them in that manner and to protect whoever buys them.
As an auctioneer is ordinarily a special agent, the purchaser is supposed to know the terms and conditions imposed by the seller on the agent. The seller or owner therefore is not bound by any terms stated by the auctioneer differing from those given to him. If the owner has imposed no terms on him, then he has the implied authority usually existing in such cases.
An auctioneer has authority to accept the bid most favorable to the seller when the sale is made without reserve and to strike down the property to the purchaser. He cannot therefore consistently with his duty to his principal refuse to accept bids, unless the bidder is irresponsible or refuses to comply with the terms of the sale. He is justified in rejecting the bids of insane persons, minors, drunken persons, trustees of the property, and perhaps in some cases of married women.
An auctioneer cannot transfer his duty to another. This rule does not prevent him from employing others to do incidental things connected with the keeping and the moving of the property. He cannot sell on credit contrary to his instructions or custom; nor would he be secure in following custom if instructed to do otherwise. After the bid has been accepted the bidder has no authority to withdraw it without the owner's consent, nor can he be permitted to do so by the auctioneer. Nor can he sell at private sale if his instruction is to sell publicly, nor can he justify himself even if he acted in good faith and sold the property for more than the minimum price fixed by the owners. Nor can he sell the property to himself, nor authorize any other person to bid and purchase for him either directly or indirectly. It is impossible with good faith to combine the inconsistent capacities of seller and buyer, crier and bidder, in one and the same transaction.
He has no authority to warrant the quality of property sold except custom or authority is expressly given to him. Nor is he an insurer of the safety of the goods entrusted to him for sale; he must however use ordinary and reasonable care in keeping them. Lastly, an auctioneer should disclose his principal and contract in his name. If one bought property therefore supposing it belonged to A, when in fact it belonged to B, through any manipulation of the auctioneer, the bidder would not be bound.
Automobile.– The members of the public have a right to use the public avenues for the purpose of travel and of transporting property: nor has the driver of horses any right in the road superior to the right of the driver of an automobile. Each has the same rights, and each is equally restricted in exercising them by the corresponding rights of the other.
Again, the public ways are not confined to the original use of them, nor to horses and ordinary carriages. "The use to which the public thoroughfare may be put comprehends all modern means of carrying including the electric street railroad and automobile." It has been declared that the fact that motor vehicles may be novel and unusual in appearance and for that reason are likely to frighten horses which are unaccustomed to see them, is no reason why the courts should adopt the view of prohibiting such machines.
The general rule is that all travelers have equal rights to use the highways. An automobile therefore has the same rights and no more than those of a footman.
The mere fact that automobiles are run by motor power, and may be operated at a dangerous and high rate of speed, gives them no superior rights on the highway over other vehicles, any more so than would the driving of a race horse give the driver superior rights on the highway over his less fortunate neighbor who is pursuing his journey behind a slower horse.
There is no authority or power in the state to exclude non-resident motorists from the public ways, nor have the states power to place greater restrictions or burdens on non-resident automobilists than those imposed on their own citizens.
A license to operate an automobile is merely a privilege. It does not constitute a contract, consequently it does not necessarily pass to a purchaser of the vehicle, and may, for a good reason, be revoked. Moreover the charge imposed for the privilege of operating a motor on the highway is not generally considered a tax, only a mere license or privilege fee.
An automobile may be hired from the owner. This is called in law a bailment. The bailor is not responsible generally for any negligence of the hirer in operating the car. Nor is the rule changed should the hirer be an unskilled person, unless he was an immature child or clearly lacking in mental capacity, or was intoxicated. Where the owner of an automobile delivered it to another by agreement, who was to pay the purchase price from the money derived from its use, and thereafter had complete control of the machine, his negligence could not be charged to the seller.
Again, where an automobile is hired and the chauffeur is also furnished by the owner, who pays him for operating the car, and the hirer has no authority over him except to direct his ways of going, the chauffeur is regarded as the servant of the owner. He, therefore, and not the hirer is responsible for the negligence of the chauffeur. Of course, the rule would be changed if the hirer assumed the management of the car: then the hirer alone would be liable for the chauffeur's negligence.
A party who hires an automobile from another is bound to take only ordinary care of it and is not responsible for damage whenever ordinary prudence has been exercised while the car was in his custody. If lost through theft, or is injured as a result of violence, the hirer is only answerable when these consequences were clearly the result of his own imprudence or negligence. The hirer though must account for the loss or injury. Having done this, the proof of negligence or want of care is thrown on the bailor.
If the hirer should sell the automobile without authority to a third party, the owner or bailor may bring an action against even an innocent purchaser who believed that the hirer had the title and power to sell.
There is an implied obligation on the hirer's part to use the car only for the purpose and in the manner for which it was hired. And if it is used in a different way and for a longer time, the hirer may be responsible for a loss even though this was inevitable.
Suppose the hirer misuses the car, what can the owner do? He can repossess himself, if this can be done peaceably, otherwise he must bring an action for the purpose. As the hirer acquires a qualified title to the property, he can maintain an action against all persons except the owner, and even against him so far as the contract of letting may set forth the relations between them.
When an owner or hirer undertakes to convey a passenger to a specified place and, while on the way, the car breaks down, if it cannot be properly mended at the time and the owner or hirer is able to furnish another, the law requires him to do so and thus fulfil his contract.
"The owner of a motor vehicle," says Huddy, "is of course entitled to compensation for the use of the machine. If a definite sum is not stated in the contract between the parties, there arises an implied undertaking that the hirer shall pay a reasonable amount. One who uses another's automobile without consent or knowledge of the owner, may be liable to pay a reasonable hire therefor. In case the hirer is a corporation, there may arise the question whether the agent of the company making the contract has authority to bind the company. Where a machine is hired for joy riding on Sunday, it has been held that the contract is illegal and the hirer cannot recover for the use of the automobile."
The speed of automobiles along the public highways may be regulated by law. A municipality may forbid the use of some kinds of motor vehicles on certain streets, but it cannot broadly exclude all of them from all the streets. The rules regulating travel on highways in this country are called, "the law of the road." The object of these rules is to prevent collisions and other accidents, which would be likely to occur if no regulations existed.
A pedestrian who is about to cross a street may rely on the law of the road that vehicles will approach on the proper side of the street. This rule however does not apply to travelers walking along a rural highway. Huddy says: "When overtaking or meeting such a person, it is the duty of both the pedestrian and the driver of the machine to exercise ordinary care to avoid a collision, but no rule is, as a general proposition, definitely prescribed as to which side of the pedestrian the passage shall be made."
The law of the road requiring vehicles to pass each other on the right, contrary to the English custom, has been reënforced in many or all the states by statutory enactments, and applies also to automobiles. When, therefore, two vehicles meet and collide on a public highway, which is wide enough for them to pass with safety, the traveler on the wrong side of the road is responsible for the injury sustained by the other. But a traveler is not justified in getting his machine on the right-hand side of the road and then proceeding regardless of other travelers; on the contrary, the duty of exercising reasonable care to avoid injuries to others still continues.
Not only must each one pass to the right, but each must pass on his own side of the center line of the highway, or wrought part of the road. And when the road is covered with snow, travelers who meet must turn to the right of the traveled part of the road as it then appears, regardless of what would be the traveled part when the snow is gone. After passing the rear of the forward vehicle an automobilist must exercise reasonable care in turning back toward the right into the center of the highway, and if he turns too soon he may be liable for damages caused by striking or frightening the horses. "If two vehicles meet in the street, it is the duty of each of them, as seasonably as he can, to get each on his own right-hand side of the traveled way of the street."
The rights of travelers along intersecting streets are equal, and each must exercise ordinary care to avoid injury to the other. An automobilist nearing an intersection should run at proper speed, have his car under reasonable control, and along the right-hand side of the street. If two travelers approach the street crossing at the same time neither is justified in assuming that the other will stop to let him pass. When one vehicle reaches the intersection directly in advance of the other, he is generally accorded the right of way, and the other should delay his progress to enable the other to pass in safety.
The driver of an automobile may be charged with negligence if, without warning to a vehicle approaching from the rear, he turns or backs his machine and causes a collision. Indeed, it is negligence for a chauffeur to back his machine on a city street or public highway without looking backward; and especially if one backs his car on a street car track without looking for street cars.
If an obstruction exists on the right-hand side of a highway, the driver of a car may be justified in passing to the other side, and in driving along that side until he has passed the obstacle. Under such circumstances he has a right to be on the left side temporarily; and if he exercises the proper degree of care while there, is not liable for injuries arising from a collision with another traveler. But if the obstruction is merely temporary, it may be the duty of the driver to wait for the removal and not to pass on the wrong side of the highway.
An automobilist must exercise reasonable or ordinary care to avoid injury to other persons using the highway. What this is depends on many circumstances, and each case to some extent is decided by its own facts. Consequently thousands of cases have already arisen, and doubtless they will still multiply as long as automobiles are used and their users are negligent.
The competency of the driver is one of the unending questions. Of course he should be physically fit, not subject to sudden attacks of dizziness, possessing sufficient strength and proper eyesight and a sober non-excitable disposition. It is said, that a chauffeur is not incompetent who requires glasses. But he certainly would be if his eyesight was poor and could not be aided by the use of them.
The driver must at all times have his car under reasonable control so that he can stop in time to avoid injury. He must keep a reasonably careful lookout for other travelers in order to avoid collision; also for defects in the highway. If by reason of weather conditions, lights or other obstructions, he is unable to see ahead of him, he should stop his car. If there be no facilities for stopping for the night, a driver is not negligent should he proceed through the fog.
Passing to the liability of the owner of a car for the acts of his chauffeur, the general rule is, he is then liable when the chauffeur is acting within the scope of his owner's business. When the owner himself is riding in the car there is less difficulty in fixing the liability, but when the chauffeur uses the car without the owner's consent, he is not liable for the conduct of the driver. And this is especially so in using a car contrary to the owner's instructions and for the chauffeur's pleasure; or in using it for his own business with the owner's consent. And the same rule generally prevails whenever a member of a family uses his parent's car without his knowledge and consent, and especially when forbidden. But the parent is liable for the running of a car with his knowledge by a member of his family and for the convenience or pleasure of other members. See Chauffeur; Garage Keeper.
Bailor and Bailee.– To create this relation the property must be delivered to the bailee. Though a minor cannot make such a contract, yet if property comes into his possession he must exercise proper care of it. Should he hire a horse and kill the animal by rash driving, he would be liable for its value. A corporation may act as bailor or bailee, and an agent acting therefor would render the corporation liable unless he acted beyond the scope of his authority.
Suppose one picks up a pocketbook, does he become the owner? Is he a bailee? Yes, and must make an honest, intelligent effort to find the owner; if failing to do so, then he may retain it as his own, meanwhile his right as finder is perfect as against all others. Should the true owner appear, whatever right the finder may have against him for recompense for the care and expense in keeping and preserving the property, his status as finder does not give him any lien unless the owner has offered a reward to whoever will restore the property. To this extent a lien thereon is thereby created.
The statutes generally provide what a person must do who has found lost property. Suppose a person appears who claims to be the owner of the thing found, what shall the finder do in the way of submitting it to his inspection? In one of the recent cases the court decided that it was a question of fact and not of law whether the finder of lost property had given a fair and reasonable opportunity for its identification before restoring it, and whether the claimant should have been given an opportunity to inspect it in order to decide whether it belonged to him.
The finder does not take title to every article found and out of the possession of its true owner. To have even a qualified ownership the thing must be lost, and this does not happen unless possession has been lost casually and involuntarily so that the mind has no recourse to the event. A thing voluntarily laid down and forgotten is not lost within the meaning of the rule giving the finder title to lost property; and the owner of a shop, bank or other place where the thing has been left is the proper custodian rather than the person who was the discoverer.
If a lost article is found on the surface of the ground, or the floor of a shop, in the public parlor of a hotel, or near a table at an open-air place of amusement, or in the car of a railroad it becomes, except as against the loser, the property of the finder, who appropriates it regardless of the place where it was found. Once a boat was found adrift and the finder made the needful repairs to keep it from sinking, yet the owner was mean enough to refuse to pay for them. The court compelled him to make good the amount to the finder.
The law regards the possession of an article which is lost as being that of the legal owner who was previously in possession, until the article is taken into the actual possession of the finder. If the finder does not know who the owner is and there is no clue to the ownership, there is no larceny although the finder takes the goods for himself and converts them to his own use. If the finder knows who the owner is or has a reasonable clue to the ownership, which he disregards, he is guilty of larceny.
Another class of cases must be noticed. Very often articles are delivered to another to have work done on them, hides to be tanned, or raw materials to be worked up into fabrics. Can a creditor of the bailee pounce on tanned hides or completed fabrics as belonging to him and take them in satisfaction of his debt? Both parties have in truth an interest in the goods, and in general it may be said that the bailor cannot thus be deprived of his interest and may follow the goods and recover them or their value.
If they are destroyed while executing the agreement, who must lose? If the bailee is not negligent or otherwise at fault, and the loss happened by internal defect or inevitable accident, the bailor would be the loser. And if workmen had been employed thereon, the bailor would also be obligated to pay for their labor.
To what extent can a bailee limit his liability by agreement? A bailee who was a cold storage keeper, stated in his receipt "all damage to property is at the owner's risk." This limitation related, so a court decided, to loss resulting from the nature of the things stored. A bailee received some cheese and gave a receipt slating that it was to be kept at the owner's risk of loss from water. It was injured from the dripping of water from overhead pipes. The bailee was, notwithstanding his receipt, held liable.
A bailor need not always be the owner of the thing bailed. He may be a lessee, agent, or having such possession and control as would justify him in thus acting. He should give the bailee notice of all the faults in the thing bailed that would expose him to danger or loss in keeping it. For example, if it were a kicking horse, he should warn the bailee to keep away from his legs.
The courts have been often troubled about the degree of care required of bailees, as it differs under varying circumstances. A bank that permits a depositor to keep a box of jewelry or silver in its vault for his accommodation, while absent from home and without receiving any compensation therefor, is not required to exercise the same degree of care as a safe deposit company whose chief business is to do such things and is paid for its service. Nevertheless a bank must exercise reasonable care, such care as is used in keeping its own things.
Suppose your package is stolen by the cashier or paying teller, is the bank responsible? That depends. If the bank knows or suspected the official was living a gay life, it ought not to keep him, and most banks would not. It is the better legal opinion, that a bank ought not to keep a president, cashier or other active official who is speculating in stocks, for the temptation to take securities not belonging to them has been too great in many cases for them to withstand. On the other hand if a long-trusted official, against whom no cause for suspicion had arisen, should steal a package from the safe, the bank would not be responsible for the loss any more than if it had been stolen by an outsider. The bank did not employ him to steal, but to perform the ordinary banking duties.
A bailee is usually a keeper only. But the nature of the property may require something more to be done. If he is entrusted with a milch cow, he must have her milked, or with cattle in the winter time which require to be served with food, he must supply it, otherwise they would starve. If he is keeping a horse which is taken sick, proper treatment should be given.
When the period of bailment is ended, the thing bailed must be returned. If it consisted of a flock of sheep, cattle and the like, all accessions must also be delivered. In many cases the bailee is not required to return the specific property, but other property of the same kind and quality. Thus if one delivers wheat for safekeeping, which is put in an elevator, the contract is fulfilled by delivering other wheat of similar kind and quality; or, if the wheat is to be made into flour, by delivering the proper amount of the same quality as the specific wheat bailed. A bailee has a lien for his service and proper expenditures in caring for and preserving the thing bailed, but not for any other debt the bailor may owe him. And if the bailee is a finder who has bestowed labor on the article found in good faith, the same rule applies.
Agisters and livery-stable men have no lien at common law, like carriers for keeping the animals entrusted to them because they are under no obligation to take them into their keeping. In Pennsylvania a different rule was long ago declared, and has ever since been maintained. As he can agree on terms, he may make such as are agreeable to both parties. Elsewhere he can impose his own terms, and may demand his pay in advance, or create, by contract, a lien if he pleases. A person who is hired as a groom to a horse for a specified time and at a fixed price, has no lien on the horse for his service, but has a lien for feed, keeping and shoeing, which should have been furnished by the owner. A contract to do this is not necessary to create the lien, it arises as if the horse had been left for keep and care without saying more.
Bankruptcy.– Before the enactment of the federal Bankruptcy Act of 1898, every state had a bankruptcy act of its own, which was generally called an insolvency law. The federal act has superseded these by virtue of the power granted to congress in the federal constitution "to establish uniform laws on the subject of bankruptcies throughout the United States."
The United States district courts in the several states are made courts of bankruptcy and have power to adjudge all persons bankrupt who have their principal places of business, residence and domicile within their respective districts; and jurisdiction also over others who simply have property within their jurisdiction.
Any person who owes debts, or business corporation, may become a voluntary bankrupt. So may an alien. He may also become an involuntary bankrupt if he has had his principal place of business here, or has been domiciled within the jurisdiction of the court for the preceding six months, or has property within its jurisdiction. Some corporations are still denied voluntary action, as well as minors and insane persons.
Who may become an involuntary bankrupt? Any person, except a wage-earner, or farmer, any unincorporated company, and any corporation engaged principally in manufacturing, trading, printing, publishing, or mercantile pursuits, owing debts to the amount of one thousand dollars. What is a manufacturing corporation, within the meaning of the law, is not even yet fully known. A corporation engaged principally in smelting ores is one; and a mining corporation, whose principal business is to buy and sell ores, is deemed a trading corporation and may become an involuntary bankrupt.
Next we may inquire, what are acts of bankruptcy? One of them is an admission of a person's inability to pay his debts. And this may be done by a corporation through its properly organized officers. Another act of bankruptcy is to convey, transfer, conceal or remove property with the intention to defraud creditors. And by concealment is meant the separation of some tangible thing like money from the debtor's estate, and secrete it from those who have a right to seize it for payment of their debts. The transfers of property covered by the act are those which the common law regards as fraudulent. If, for example, at the time of the transfer of his property one is so much indebted that it will embarrass him in paying his debts, the transfer will be deemed fraudulent; but a voluntary transfer, made by one who is free from debt, cannot be impeached by subsequent creditors. The intention to hinder, delay or defraud creditors is a question of fact to be ascertained by proper judicial inquiry.
A general assignment for the benefit of creditors is an act of bankruptcy. Likewise a general assignment for the benefit of creditors made by the majority of the board of directors and of the stockholders is an act of bankruptcy. A petition for the appointment of a receiver of a corporation under a state statute is not an assignment for the benefit of creditors and therefore is not an act of bankruptcy.
Another act of bankruptcy is to suffer or permit, when one is insolvent, any creditor to acquire a preference through legal proceedings. The term preference includes not only a transfer of property, but also the payment of money within four months from the time of filing his petition in bankruptcy. It is immaterial to whom the transfer is made if the purpose be to prefer one creditor to another. Like a fraudulent transfer the intent to prefer must be proved, though this may sometimes be presumed, as when the necessary consequence of a transfer or payment made by an insolvent debtor is to liquidate the debt of one creditor to the entire or partial exclusion of others.
Passing to the filing of the petition a voluntary petitioner should file his petition in the court of bankruptcy in the judicial district where he has principally resided for the preceding six months. When there is no estate and no claim has been proved and no trustee has been appointed, a bankrupt may withdraw his petition on paying the costs and expenses. The petition must be accompanied by a schedule of the petitioner's property, showing its kind and amount, location, money value, and a list of his creditors and their residences when known, the amount due to them, the security they have, and a claim to legal exemptions, if having any. After filing a voluntary petition the judge makes an adjudication. He may do this ex parte, that is without notice to creditors.
A petition may be filed against a person who is insolvent and has committed an act of bankruptcy within four months after such action. Three or more creditors who have provable claims amounting to five hundred dollars in excess of securities held against a debtor may file the petition, or if all the creditors are less than twelve, then one of them may file the petition provided the debtor owes him the above stated amount. Creditors holding claims which are secured, or have priority, must not be considered in determining the number of creditors and the amount of claims for instituting involuntary proceedings. The petition should state the names and residences of the petitioning creditors, also that of the bankrupt, his principal place of business, the nature of it, his act of bankruptcy, that it occurred within four months of the filing of the petition, and that the amount of the claims against him exceed five hundred dollars. The petition must be signed and properly verified, and may be afterward amended for cause in the interest of justice. On the filing of the petition a writ of subpœna is issued addressed to the bankrupt commanding him to appear before the court at the place and on the day mentioned to answer the petition. The next step, after serving the petition, is for the bankrupt to file his answer. Meanwhile his property may be seized by a marshal or receiver on proof that he is neglecting it or that it is deteriorating.
Within ten days after one has been judicially declared to be a bankrupt, he must file in court a schedule of his property, including a list of his creditors and the security held by them. Then follows the first meeting of the bankrupt's creditors, within thirty days after the adjudication. The judge or referee must be present at this meeting, also the bankrupt if required by the court. Before proceeding with other business the referee may allow or disallow the claims of creditors presented at the meeting, and may publicly examine the bankrupt, or he may be examined at the instance of any creditor. At this meeting the creditors may elect a trustee.
Subsequent meetings may be held at any time and place by all the creditors whose claims have been allowed by written consent: the court also may call a meeting whenever one fourth of those who have proved their claims file a written request to that effect.
Only a creditor who owns a demand or provable claim can vote at creditors' meetings. Nor can other creditors through filing objections to a claim prevent a bona fide claimant from voting. A creditor of an individual member of a bankrupt partnership cannot vote. Nor can creditors holding claims that are secured or that have priority vote only to a limited extent, so far as their claims are on the same basis as other creditors. To entitle secured and preferred creditors to vote at the first meeting on the whole of their claims, they must surrender their securities or priorities. If a portion of a creditor's debt is secured and a portion is unsecured, he may vote on the unsecured portion. An attorney, agent, or proxy may represent and vote at creditors' meetings, first presenting written authority, which must be filed with the referee. The referee who presides at the first meeting makes up or decides on its membership. Matters are decided at the meeting by a majority vote in number and amount of claims of all the creditors whose claims have been allowed and are present.